Quarterly Report January-September 2019 Nordax Bank AB

Business development personal loans

New lending for personal loans continued to grow strongly in the third quarter. New lending was especially robust in the Swedish market, where a more attractive offer contributed to growth in all channels. In the second quarter, new personal loan regulations were introduced in Norway, which had a slightly negative effect on the third quarter’s new lending. A decision was made in the second quarter to discontinue new lending in Germany and focus on the Nordic markets. Lending in Germany accounted for 4% of Nordax’s total lending at the end of the quarter.

Mortgage loans

Nordax began offering mortgages in Sweden in 2018. The main target group is customers with some form of non-traditional employment, i.e. self-employed or temporary employees, including project, part-time or replacement workers. Thanks to thorough credit assessments and personal contacts, more loans are approved for this customer group, which is often denied by the major banks despite being financially stable. Interest in the offer has been high and new lending continues to grow.

At the end of the first quarter, Nordax also began offering mortgage loans in the Norwegian market through loan brokers, and at the end of the second quarter mortgage applications were being accepted through Nordax’s website. Lending in the third quarter developed strongly in connection with a diversification of marketing channels.

Equity release mortgages

New lending has grown strongly during the year. One contributing factor has been increased marketing, which has led to greater awareness of Swedish Hypotekspension (SHP) as a brand and equity release mortgages as a product. More applicants also became eligible for an equity release mortgage during the year after the lending limit was changed and the offer was extended to more of the country’s municipalities.

Portfolio development

Total lending amounted to SEK 23.8 billion (SEK 15.1 billion as of 31 December 2018). The acquisition of SHP, expansion of the product offering to include mortgage loans, and strong quarterly performance in the Swedish market were the most important reasons for the strong growth. Excluding the SHP acquisition, lending grew by 23%, partly due to positive currency effects. All geographical markets except Germany grew. In the Swedish market, mortgages, personal loans and equity release mortgages all contributed to the strong trend.

Results January-September 2019 (compared to January-September 2018) 

  • Operating profit amounted to 388 MSEK (375). Increase due to higher net interest income and lower credit losses.
  • Net interest income amounted to 1 093 MSEK (982). Higher net interest income due to a growing lending portfolio and acquisition of SHP.
  • Operating expenses amounted to -589 MSEK (-393). Increased costs as a result of investments in growth initiatives to grow and broaden Nordax’s business but also aquisition costs and other costs related to SHP.
  • Credit losses amounted to -168 MSEK (-276), corresponding 1.2 per cent (2.6) of average lending.

For more information, please contact 

Patrick McArthur, CFO, Nordax

Tel: +46 760 32 69 70